Note 34 Valuation of financial assets and liabilities at fair value

Group financial instruments are valued either at accrued acquisition value or fair value depending on how the instrument is classified according to IFRS 9. Items which have been the object of valuation at fair value are unlisted shareholdings, different types of derivatives, unlisted funds and contingent consideration.

Group unlisted shareholdings are valued at fair value. The purchase price is a reasonable approximation of fair value on the balance sheet date. The fair value of the Group’s shares in unlisted funds is based on the valuation received from the managing institute. The valuation belongs to level 3 in the fair value hierarchy. However, the Group does not have access to the information about the input data used by the institute for the valuation and therefore no information about such data is given. The fair value of the Group’s contingent considerations has been calculated as the current value of the amounts expected to be paid out according to the individual contracts. The single largest Group contingent consideration will be paid out if Peab receives a certain permit for quarry operations. The valuation of the consideration is therefore dependent on how Peab judges the probability of receiving said permit. The value of this contingent consideration on the balance sheet date was SEK 22 million (22). Other contingent considerations are based on projects received and profit/loss in the acquired businesses.

When calculating the fair value of interest-bearing receivables and liabilities and interest rate swaps, future cash flows were discounted to the listed market interest for the remaining terms of maturity. Spot rates on the balance sheet date were used to calculate the fair value of currency swaps. The recognized value of non-interest-bearing asset and liability items such as accounts receivable and accounts payable with a remaining maturity of less than six months is believed to reflect the fair value. The tables below show the recognized values compared with the estimated fair value per type of financial asset and liability.

Valued at fair value via the income statement

Derivatives used in hedge accounting

Financial assets available-for-sale 1)

Accrued acquisition value 2)

Other financial liabilities

Total recognized value

Fair value

Group, MSEK

2018

2017

2018

2017

2017

2018

2017

2018

2017

2018

2017

2018

2017

Värderade till verkligt värde via resultaträkningen

Derivat som används i säkrings-redovisning

Finansiella tillgångar som kan säljas 1)

Upplupet anskaffningsvärde 2)

Övriga finansiella skulder

Summa redovisat värde

Verkligt värde

Koncernen, Mkr

2018

2017

2018

2017

2017

2018

2017

2018

2017

2018

2017

2018

2017

Financial assets

Finansiella tillgångar

Other securities held as fixed assets

Andra långfristiga värdepappersinnehav

109

80

109

80

109

80

Interest-bearing long-term receivables

Räntebärande långfristiga fordringar

1,445

1,520

1,445

1,520

1,449

1,525

Other long-term receivables

Andra långfristiga fordringar

0

2

89

108

89

110

89

110

Accounts receivable

Kundfordringar

10,166

8,709

10,166

8,709

10,166

8,709

Interest-bearing current receivables

Räntebärande kortfristiga fordringar

640

411

640

411

640

411

Prepaid expenses and accrued income

Förutbetalda kostnader och upplupna intäkter

33

28

33

28

33

28

Other current receivables

Övriga kortfristiga fordringar

1

4

513

96

514

100

514

100

Liquid funds

Likvida medel

1,376

595

1,376

595

1,376

595

Total financial assets

Summa finansiella tillgångar

110

4

0

2

80

14,262

11,467

–

–

14,372

11,553

14,376

11,558

Financial liabilities

Finansiella skulder

Interest-bearing long-term liabilities

Räntebärande långfristiga skulder

5,194

2,573

5,194

2,573

5,187

2,573

Other long-term liabilities

Övriga långfristiga skulder

23

23

22

44

116

136

161

203

161

203

Interest-bearing current liabilities

Räntebärande kortfristiga skulder

1,818

1,169

1,818

1,169

1,818

1,169

Accounts payable

Leverantörsskulder

5,177

4,882

5,177

4,882

5,177

4,882

Accrued expenses and deferred income

Upplupna kostnader och förutbetalda intäkter

4

14

4

14

4

14

Other current liabilities

Övriga kortfristiga skulder

12

11

2

91

141

103

154

103

154

Total financial liabilities

Summa finansiella skulder

35

34

22

46

–

–

–

12,400

8,915

12,457

8,995

12,450

8,995

Unrecognized profit/loss 3)

Oredovisade vinster/förluster 3)

11

5

1) Category valid only until the end of 2017.2) Financial assets classified 2017 as Accounts and loan receivables.3) In cases where there is a difference between recognized value and fair value the valuation belongs to level 3 in the fair value hierarchy.

The effect of valuing financial instruments at fair value was included in the Group’s income statement for a total of SEK -17 million (-1). The effects stem from the market value of the outstanding currency swaps.

Valued at fair value via the income statement

Accrued acquisition value 1)

Other financial liabilities

Total recognized value

Fair value

Parent company, MSEK

2018

2017

2018

2017

2018

2017

2018

2017

2018

2017

Värderade till verkligt värde via resultaträkningen

Upplupet anskaffningsvärde 1)

Övriga finansiella skulder

Summa redovisat värde

Verkligt värde

Moderbolaget, Mkr

2018

2017

2018

2017

2018

2017

2018

2017

2018

2017

Financial assets

Finansiella tillgångar

Other securities held as fixed assets

Andra långfristiga värdepappersinnehav

0

0

0

Accounts receivable

Kundfordringar

0

1

0

1

0

1

Current receivables Group companies

Kortfristiga fordringar koncernföretag

2,736

3,472

2,736

3,472

2,736

3,472

Total financial assets

Summa finansiella tillgångar

0

–

2,736

3,473

–

–

2,736

3,473

2,736

3,473

Financial liabilities

Finansiella skulder

Long-term liabilities Group companies

Långfristiga skulder till koncernföretag

3,883

6,326

3,883

6,326

3,883

6,326

Accounts payable

Leverantörsskulder

31

25

31

25

31

25

Current liabilities Group companies

Kortfristiga skulder till koncernföretag

59

347

59

347

59

347

Total financial liabilities

Summa finansiella skulder

–

–

–

–

3,973

6,698

3,973

6,698

3,973

6,698

1) Financial assets classified 2017 as Accounts and loan receivables.

Fair value

Measurement of fair value is based on a three-level hierarchy.

Level 1: prices that reflect quoted prices on an active market for identical assetsLevel 2: based on direct or indirect observable inputs not included in level 1Level 3: based on inputs unobservable to the market

The table below shows the allocated level of financial assets and financial liabilities recognized as fair value in the Group balance sheet.

Level 2

Level 3

Total

Group, MSEK

2018

2017

2018

2017

2018

2017

Nivå 2

Nivå 3

Summa

Koncernen, Mkr

2018

2017

2018

2017

2018

2017

Financial assets

Finansiella tillgångar

Other securities held as fixed assets

Andra långfristiga värdepappersinnehav

109

59

109

59

Whereof shareholding in unlisted company

Varav onoterade aktier

20

20

–

Whereof investment in unlisted funds

Varav onoterade fonder

89

59

89

59

Other long-term receivables

Andra långfristiga fordringar

2

–

2

Whereof commodity hedging with futures

Varav råvarusäkring med termin

2

–

2

Other current receivables

Övriga kortfristiga fordringar

1

4

1

4

Whereof currency derivatives

Varav valutaderivat

1

4

1

4

Total financial assets

Summa finansiella tillgångar

1

6

109

59

110

65

Financial liabilities

Finansiella skulder

Other long-term liabilities

Övriga långfristiga skulder

22

44

23

23

45

67

Whereof interest rate swaps

Varav ränteswappar

18

44

18

44

Whereof commodity hedging with futures

Varav råvarusäkring med termin

4

4

–

Whereof contingent consideration

Varav villkorad köpeskilling

23

23

23

23

Other current liabilities

Övriga kortfristiga skulder

1

2

11

11

12

13

Whereof currency derivatives

Varav valutaderivat

1

2

1

2

Whereof contingent consideration

Varav villkorad köpeskilling

11

11

11

11

Total financial liabilities

Summa finansiella skulder

23

46

34

34

57

80

The tables below shows reconciliation between the opening and closing balance for assets and liabilities included in level 3.

Unlisted shares 1)

Unlisted funds

Group, MSEK

2018

2018

2017

Onoterade aktier 1)

Onoterade fonder

Koncernen, Mkr

2018

2018

2017

Opening balance

Ingående balans

21

59

54

Investments during the year

Investeringar under året

–

19

17

Sales during the year

Försäljningar under året

-12

–

–

Repayment during the year

Återbetalningar under året

–

–

-14

Dividends received

Erhållen utdelning

–

-3

-1

Reported in profit/loss for the year 2)

Redovisat i årets resultat 2)

11

14

-2

Reported in other comprehensive income

Redovisat i övrigt totalresultat

–

–

5

Closing balance

Utgående balans

20

89

59

1) As of 2018 even unlisted shares are valued at fair value.2) Recognized in net financial items.

Contingent consideration

Group, MSEK

2018

2017

Villkorad köpeskilling

Koncernen, Mkr

2018

2017

Opening balance

Ingående balans

34

23

Acquisitions for the year

Årets förvärv

2

11

Payments during the year

Årets utbetalningar

-3

–

Reported in profit/loss for the year:

Redovisat i årets resultat:

Other operating costs

Övriga rörelsekostnader

1

–

Interest expense (discount) 1)

Räntekostnad (diskontering) 1)

0

0

Reported in other comprehensive income

Redovisat i övrigt totalresultat

0

–

Closing balance

Utgående balans

34

34

1) Recognized in net financial items.

The contingent consideration will amount to at least SEK 3 million and at most SEK 40 million.

Peab AB is a public company, Company ID 556061-4330. Domicile Båstad, Sweden.

All values are expressed in Swedish krona. Krona is abbreviated to SEK, thousands of krona to TSEK and millions of krona to MSEK. Numbers presented in parentheses refer to 2016 unless otherwise specified.

Data regarding markets and the competition are Peab’s own assessments, unless another source is specified. These assessments are based on the best and latest available facts from, among others, previously published material.

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